Coal stocks saw broad gains in the morning session. As of writing, SHOUGANG RES (00639) rose 5.73% to HK$2.77; CHINA QINFA (00866) increased by 5.41% to HK$1.95; YANKUANG ENERGY (01171) climbed 3.18% to HK$14.61; CHINA SHENHUA (01088) advanced 2.42% to HK$44.86.
The positive sentiment is driven by several factors. On May 22, a major gas explosion occurred at the Liushenyu Coal Mine operated by Tongzhou Group in Qinyuan County, Changzhi, Shanxi. This accident is expected to trigger stricter nationwide coal mine safety inspections. Concurrently, Indonesia has announced plans to nationalize coal export management rights, tightening overseas supply.
Furthermore, China is approaching its summer peak electricity consumption period. Meteorological authorities predict that El Niño conditions may develop after May 2026, with high temperatures expected to boost demand for thermal coal.
Analysts are optimistic about rising coal prices. They note that the drivers for price increases are strengthening, with a persistent price inversion for imported coal. Domestic supply is expected to contract due to expanded safety inspections and increased mine suspensions following the Shanxi accident. As coal price adjustments take full effect and summer demand peaks, profitability improvements for the coal sector are anticipated.